Correlation Between Koppers Holdings and Hawkins
Can any of the company-specific risk be diversified away by investing in both Koppers Holdings and Hawkins at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Koppers Holdings and Hawkins into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koppers Holdings and Hawkins, you can compare the effects of market volatilities on Koppers Holdings and Hawkins and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Koppers Holdings with a short position of Hawkins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koppers Holdings and Hawkins.
Diversification Opportunities for Koppers Holdings and Hawkins
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Koppers and Hawkins is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Koppers Holdings and Hawkins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawkins and Koppers Holdings is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Koppers Holdings are associated (or correlated) with Hawkins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawkins has no effect on the direction of Koppers Holdings i.e., Koppers Holdings and Hawkins go up and down completely randomly.
Pair Corralation between Koppers Holdings and Hawkins
Considering the 90-day investment horizon Koppers Holdings is expected to generate 1.78 times less return on investment than Hawkins. In addition to that, Koppers Holdings is 1.2 times more volatile than Hawkins. It trades about 0.2 of its total potential returns per unit of risk. Hawkins is currently generating about 0.43 per unit of volatility. If you would invest 10,675 in Hawkins on September 1, 2024 and sell it today you would earn a total of 2,776 from holding Hawkins or generate 26.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koppers Holdings vs. Hawkins
Performance |
| Timeline |
| Koppers Holdings |
| Hawkins |
Koppers Holdings and Hawkins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koppers Holdings and Hawkins
The main advantage of trading using opposite Koppers Holdings and Hawkins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koppers Holdings position performs unexpectedly, Hawkins can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Hawkins will offset losses from the drop in Hawkins' long position.| Koppers Holdings vs. H B Fuller | Koppers Holdings vs. Minerals Technologies | Koppers Holdings vs. Quaker Chemical | Koppers Holdings vs. Oil Dri |
| Hawkins vs. H B Fuller | Hawkins vs. Minerals Technologies | Hawkins vs. Quaker Chemical | Hawkins vs. Oil Dri |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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